File Bankruptcy Before or After Start of Maternity Leave?

May 13th, 2013 by Questions

My husband recently left me with with all of the household debt (all in my name). I currently have a 2 year old and am expecting another baby within the next 3 months.

I was hoping to file for bankruptcy before having the baby. My issue is, If I file before the baby comes, I will have a household of 2 and will be slightly over the surplys allowable income for a single month. What happens when I end up having the baby? Am I able to change the number of people in my household, increasing my allowable income monthly? Do I also have to declare my new income after the baby arrives, as I will be on EI plus get employer top-ups? If I do have to declare the new income I am getting from EI and top-up, this puts me in a very bad and unrealistic situation, as I am not going to be taxed properly on my maternity leave payments and will likely owe thousands at the end of the year — do trustees take into considering that no or not enough taxes are being deducted from my monthly income while on maternity leave or will they force me to include it as surplus income? I would not be able to pay my taxes at the end of the year if that is the case.

The bottom line it, do I file before or after the baby comes? If I file before the baby comes, do they just adjust my allowable income when the baby arrives and not look at what I’m making on EI/top-up?

Posted from: Ontario


One Response to “File Bankruptcy Before or After Start of Maternity Leave?”

, Barton Goth - Goth & Company Inc. -Trustee in Bankruptcy said:

You will be able to adjust the total number of people in the household once the new baby arrives, that is not a problem. But you will find that you also have to notify your trustee of any additional income that you will receive. In terms of exactly how the calculation is done you are best to meet with your trustee directly and ask him how that situation is handled. The trustee will quickly be able to show you how that would be handled.

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